Dreaming about Zero Tax in India

Zero Tax

“Taxes are paid nation are made” we hear this famous quote many times and we believe in that. That is the reason we pay millions of rupees as Direct tax to government.

By this you can simply say that India is tax savvy country & we love to pay so much tax. Government imposes 20 types of taxes to us and we keep on paying taxes.

Now at the same time if some politician says that he will reduce or abolish income tax than naturally people will favour him. Yes I am talking about recent statement made by Shri Narendra Modi that “Current Tax system is burden on common man and BJP will abolish income, sales and excise taxes.”  Is this real promise or political stunt?

Well is it possible to dream about zero tax in India?

It might be surprising to you that there are countries like UAE, Qatar, Oman, Kuwait, Saudi Arabia  where you do not need to pay any income tax. So same is possible at India?

Yes it is possible to abolish Income Tax. But we need to think weather it is advisable to do that?

Is it advisable to abolish Income Tax?

Middle class salaried people will be more than happy if government decides to abolish Income Tax. Maximum Income tax is paid by middle class salaried people as they don’t have any choice.  Poor does not pay any tax and for rich there are ways and means to hide income and run from income tax.

As per statistic only 36 million people pays income tax in India that is 3% of total population. In contrast, in the U.S., about 45 percent of the population pays taxes, which means that, despite India’s much-larger population, more Americans than Indians actually pay taxes.

Government should think to modify or simplify tax system rather than abolishing it. Few pointers in same direction are given below.

Suggestion:-

(1)   Instead of abolishing total income tax government should lower down tax rate.

(2)   Government should influence new tax payers and increase base of tax payers

(3)   Government should bring all black money to India which is deposited in Swiss bank

(4)   Government should find way to abolish Black Money.

(5)   Government should Tax super rich at higher rate.

Abolishing Income Tax may be game changer and surely bring political mileage to BJP but twisting this idea little bit and following above suggestion will bring lot of advantage to India.

To make moment lighter I am here with  cartoon made by Alok Ranjan.

income tax india

Image Credit:-  Alok Ranjan

Do share this thought and views with your friends on facebook and Twitter!

Article by Raviraj

Raviraj is the man behind moneyexcel.com. He is graduate in finance, engaged in blogging since 6 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

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